POV: Can Indian mobile phone brands survive?

Recently, when afaqs! interviewed Manu Kumar Jain, vice-president, Xiaomi and managing director, Xiaomi India, we found out that the brand's ability to manufacture hi-tech smartphones equipped with innovative specifications at a price which is way below that of its competitors, is its unique selling point. Due to this, the Chinese brand grabbed the top spot in the final quarter of 2017 in the Indian smartphone segment; a claim refuted by the erstwhile market topper for six years - Samsung. Interestingly, in 2014 when Xiaomi entered the Indian mobile phone market, the brand initially differentiated itself from the competition by rejecting conventional advertising norms and proudly declaring its customers to be its brand ambassadors. However, Xiaomi now has Lowe Lintas as its mainline ad agency and Madison as its media agency.

Smartphones introduced in India by Chinese companies such as Xiaomi, Vivo, Oppo, Huawei, and Lenovo (who now owns Motorola) have become the preferred choice for smartphone buyers in India. The collective market share of these China-based vendors in India stood at 53 per cent in 2017 according to the data released by International Data Corporation - IDC. But it's not just this, with the advent of global tech giants such as Samsung, Sony, Google Pixel, HTC etc. the sales of Indian smartphone brands are indeed taking a hard hit.

With an aim to help domestic smartphone manufacturers recover lost ground, the Central Government undertook several measures in the recent past which included easing norms for local manufacturing and hiking customs duty on mobile phones. Although the domestic players - Intex, Lava, Karbonn, Micromax et al - do acknowledge the government's efforts, they fail to withstand the Chinese vendors when it comes to providing smooth user-experience at affordable prices, robust distribution networks and mass-scale indigenous production.

In such a scenario, afaqs! asked a few senior people from the industry if the Indian mobile phone brands could survive and what they could do to regain the market share.

Sunil Raina, president and business head, Lava International

Sunil Raina

We are confident of our growth despite fierce competition. Our focus is on creating value for Indian consumers and for that, we are building our brand on key pillars like our research and development capability in India and China, robust distribution networks and unmatched after-sales service. We have a complete in-house R&D set-up in India and China with over 700 engineers.

We have end-to-end control of product design, quality and manufacturing. As a result, we have given India its first 'Designed in India' mobile phone.

Our single-layer distribution structure and cash and carry model are unique in the industry. We have a well-built and robust distribution network with an immense trust of over 1,200 distributors and 1, 65,000 retailers.

CyberMedia Research recently recognised us as the Most Trusted Brand amongst retailers putting us ahead of all domestic and international players. We have the strongest customer service network across India, with close to 1,000 service points - marking its presence even in the remotest part of the country. We always believe in doing the right things for consumers and creating value for them - which will take our growth journey forward.

Sandeep Budki, founder and editor, The Mobile Indian

Sandeep Budki

If you talk about Indian handset brands, we have to divide them into two categories - smartphones and feature phones. Out of these the feature phone manufacturers will survive for some more time because almost 60 per cent of Indian mobile phone market is still a feature phone market. However, the smartphone market looks very challenging right now and if Indian handset manufacturers don't do anything significant, they might not survive.

The biggest challenge for the Indian smartphone manufacturers today is that they have stopped innovating. Also, most of the Indian handset players were only importing ODMs (original device manufactures) from China. So, when Chinese manufacturers saw how the Indian brands are earning so much revenue from the products which they (Chinese) were making, they said why don't we enter the Indian market with our own brands and work on tight margins. Thus, their market strategy was much faster and more evolved as compared to the Indians.

From the marketing perspective, a company needs to have solid messaging which should sell across. Right now the Indian players/ mobile phone manufacturers don't have any messaging. Therefore, due to the lack of products/ vision for the market, the Indian brands don't have any statement to make. Hence, they cannot succeed in their marketing activities.

So first-of-all, the Indian brands need to take stock of the situation and accept their folly. They should look out for options which can be implemented in the short term - such as move beyond price war. For example, Micromax, some time ago, came up with 'Around You Services', which was a very nice concept. So, now the Indian brands should focus on quality and customer retention.

Shashin Devsare, executive director, Karbonn Mobiles

Shashin Devsare

With our continuous effort in promoting a digitised India, we are confident of our presence in the Indian market. As a home-grown brand, we have always believed that the real strength of our consumer base is towards empowering every Indian with smart telephony.

In order to bring the next half-a-billion users into smart telephony, we need to create a language ecosystem which Indian handset brands probably will be better poised to do. We are working very closely with telecom operators and VAS partners to contribute to and push for customisation for the local market which is critical for Indian smartphone ecosystems and significant in the long run.

The Chinese brands have been deploying strategies like restricting themselves to the top of the market and pricing their products aggressively. There are very little efforts being made towards customising the products for the Indian consumers. As a result, we have hardly witnessed smartphone penetration of more than 30 per cent in the country.